Environmental economic aspects of river basins and their catchment. Identification and quantification of flood related land use externalities

Environmental economic aspects of river basins and their catchment. Identification and quantification of flood related land use externalities

[Abstract]This thesis investigates a common problem of land use impacts on flood damage costs on a catchment scale. It does this through a particular case study, to quantify the technical upstream-downstream dependencies and highlights the externalities through hydroeconomic
analysis of flood damages and mitigation costs. The substantive content of the project is cross disciplinary.

Peak and volume of river flows are functions of the catchment surface characteristics. This means that any impacts to the run-off regime (for example surface sealing or river training) could affect people and land users in the lower catchment. Thus, upstream activities can
cause higher flood peaks, and also entail higher damages downstream. These damages are either borne by the affected parties or they are mitigated by state financed flood defence works or offset with financial compensation. These costs are usually not included in the economic considerations of the upstream land user who is partially causing them. In economic terms, these effects are referred to as unidirectional externalities. This means that a producer can export parts of his production costs to third parties and these are not included in the price of the product.

The Herzogbach is a small tributary of the Danube River in Lower Bavaria. It is located in a rural area, dominated by intensive farming practices. Two villages (Bachling and Buchhofen) in the headwaters and middle section of the catchment and one city (Osterhofen) in the lower
catchment were analysed to determine the impact of upstream land use practices on the flood situation.

A combination of hydrological and hydraulic modelling provided the core data to allow the interpretation of economic data, using methods of cost damage estimation. A hydrological model of the catchment provided hydrograph simulations based on (a) a regionalisation approach,
(b) hydrologic flood routing and (c) hydrologic reservoir routing. A two dimensional stream flow model was then used to convert the hydrographs into flood levels, to simulate
the run-off in settled areas and determine the flood affected areas, flood levels and flow velocities. Estimates for flood damages or mitigation costs resulting from different hydrological scenarios were compared. The scenarios are based on different land uses and allow
economic externalities to be estimated.

It was found that intensive farming and river training increase the peaks, shape and volume of flood waves in comparison to extensive land use, grassland or forest. In the study area, especially river training reduced the detention effect of the river bed and the natural flood
plain. These significant changes to the natural run-off regime directly affect land use in the lower catchment through flood damages and increased flood risk, and by reducing the effectiveness of planned or existing flood protection works.

The thesis concludes with linked technical and economic findings which indicate a rich potential new area for research - “hydroeconomics”. The published literature shows few people have worked in this cross disciplinary area. The technical finding is that changes to land use, especially in agriculture, can increase the flood damages in downstream settlements or increase the cost of flood mitigation works significantly. From an economic point of
view, this is a unidirectional externality which should be considered in catchment and flood management. Possible solutions could include the control of land use and instruments such as separate waste water fees for rainwater and sewage or run-off certificates.